L'Oreal is on track to hit high sales target

The world's largest cosmetics company reported a 7.7 per cent increase in group sales, on a like-for-like basis, to $4.1bn for the three months ending 30 September. Sales for the first nine months of 2007 were $12.6bn, an increase of 7.7 per cent on last year, leading L'Oreal to confirm its sales predictions for the financial year. "In view of the strong growth achieved in the first nine months, we can confirm our like-for-like sales growth target bracket for 2007 of 7 to 8 per cent,"​ said CEO Jean-Paul Agon. Sales at L'Oreal's largest division, consumer products, rose 8 per cent to $2bn supported by strong performances in facial skincare and make-up. Within the division, the successful launch of the anti-ageing range Skin Genesis was described as the major event of the quarter. In the luxury products division, sales increased 7.2 per cent to $938m, with Diesel's first fragrance Fuel for Life playing an important role. Under L'Oreal's wing, the Body Shop continued to perform well posting 6.5 per cent sales growth over the quarter with new products driving growth. By geographic zone, L'Oreal posted 4.3 per cent growth North America, which the company described as a 'gradual improvement'. Growth in the US cosmetics market in general has been sluggish but L'Oreal achieved positive sales figures by increasing its market share. However, an analyst surveyed by Reuters said L'Oreal's performance in North America was below par and added that the company's management is indicating that the US market is slowing down. Group sales increased 4.0 per cent in Western Europe, where Great Britain and Spain made the largest contributions to growth. Growth in the emerging markets was highest with Eastern Europe leading the way. Sales in the region grew 29.9 per cent, helped along by the development of the Garnier and L'Oreal Paris brands and the successful rolling out of new brands such as Kiehl's and Giorgio Armani make-up in Moscow. Sales in Latin America and Asia also grew at double-digit rates with growth Thailand and Argentina being particularly high.